ISLAMIC State jihadis have stormed a cafe in the Bangladeshi capital of Dhaka leaving at least two dead and thirty injured following a tense hostage situation.
Hundreds of Bangladeshi police officers laid siege on the building, with officials confirming they had freed twelve hostages, including four foreigners.
The fate of other hostages is currently unknown, with at least seven Italian nationals thought to be among those taken by the gunmen when they stormed the Holey Artisan Bakery Cafe.
Six militants were reportedly killed after government troops were able to take control of the main building where sounds of gunfire and explosions could be heard from outside.
As the siege raged on Mizanur Rahman Bhuiyan, a deputy director at the Rapid Action Battalion force said: “Our commandos have stormed into the restaurant. Intense gunfighting on.”
But the twisted terror cell Islamic State, who claimed responsibility for the attack through their official propaganda network, said they had killed 24 people including tourists in the strike.
While officials are yet to confirm the group’s claims, as many as 30 people of different nationalities are believed to have been injured in the attack.
It is believed nine gunman burst into the popular cafe in the diplomatic heart of the South Asian city and opened fire.
One person who escaped said one gunman shouted "Allahu Akbar" during the attack.
A spokesman for the Foreign Office said: “We are urgently seeking more information from the Bangladeshi authorities following a shooting in Dhaka and are monitoring the situation closely.”
The American Embassy tweeted "Please shelter in place and monitor news”.
A worker at the bakery explained how people burst into the store and took the chief chef hostage.
Sumon Reza said: “They blasted several crude bombs causing widespread panic among everyone. I managed to flee during this confusion.”
Another eyewitness witness said he could hear gunfire from his house and it "looked quite bad".
The US State Department confirmed it had accounted for all its diplomatic staff, but not private citizens.
Eyewitness Rashila Rahim said: “I saw the glass of my drawing room shattered.
“My aunt, her daughter and two friends went there to break the Ramadan fast and they have not come back. We cannot even check where they are.”
The news comes just hours after a Hindu priest was hacked to death 188 miles south west of the capital.
Shaymanonda Das, 45, was murdered in front of a temple in Jhinaidah district.
Police chief Mahbubur Rahman said: “He was preparing morning prayers with flowers at the temple early in the morning and that time three young people came by a motor bike and killed him with machetes and fled away.
“The nature of killing was similar with the local militants, but we can not say more at the moment.”
Members of minority Muslim sects, leaders of other religions and liberal activists have been targeted by terrorists in Bangladesh recently.
ISIS has has claimed responsibility for some of the recent killings although the government denies the jihadist death cult has a presence in the country, saying homegrown extremists are behind the attacks.